The economic essence of insurance

With the evolution of commodity-money relations, people allmore need to protect their interests, property from possible unforeseen circumstances, whether natural cataclysms or the banal failure of another party to the contract certain obligations. The economic essence of insurance is defined in order to protect the subjects from possible losses, and in the situation of occurrence of the case to compensate them for losses.

The insurance market is the most important component of the financial market, where the insurance service is sold and bought.

In order to fully understand the essence of insurance, it is necessary to familiarize with its main subjects:

- an insurer is a legal entity that has received a license to engage in insurance activities. Such companies can not carry out commodity-intermediary, production and bank transactions;

- insurant - legal or operativean individual who, by virtue of the laws of the Russian Federation, has the right to act as a party to the insurance contract, and insurance payments may be assigned to a third party. After the conclusion of the contract, policyholders are issued a policy that certifies their right to this service;

- insurance agent - fiz. or jur. a person who represents the interests of the insurer, speaking on his behalf. For this, firms receive fees in the form of commissions;

- insurance broker - physical or legala person who acts as an intermediary in insurance relations, but at the same time on his own behalf. He explores the conjuncture, competitive conditions and develops for his client a better insurance program.

The economic essence of insurance is also expressed in certain characteristics, according to which this area of ​​activity differs from others:

1. There is a risk of occurrence of an insurance event, which causes damage, and then it is reimbursed.
2. The need of individuals and legal entities to ensure that future damage is covered, is satisfied only by this service, which also reflects the essence of insurance.
3. The damage is distributed over time.
4. All collected, mobilized in the insurance fund money resources (insurance premiums) are returned in the form of insurance payments.

Among other things, the economic essence of insurance is disclosed through specific functions. It is accepted to allocate risky, precautionary, savings and control functions.

The risk function promotes redistributionof money at the cost between insurance participants, this is due to the onset of the insured event. It is a large number of risks that led to the development of many industries and sub-sectors of insurance.

The precautionary is connected with the fact that part of the money received from contributions is directed to the prevention of insurance risk, its reduction or exclusion.

Savings function is based on protecting citizens who have reached a particular social position and wealth from possible unforeseen insurance risks.

Finally, the control function assumes strict observation of how the targeted funds of insurance funds are spent.

Thus, we examined what the essence and functions of insurance are. It remains to highlight another important issue.

Insurance funds - the key concept of insurance -this is all money, formed by insurance contributions, are in the operational management of the insurer. These include the concepts of the state reserve fund (state centralized insurance fund); the insurer's fund; reserve fund of entrepreneurial structures formed in the process of self-insurance.

So, we figured out what is economicessence of insurance and examined the distinctive features. Also described the main subjects - insurers, insurers, brokers and agents. It can be concluded that the essence and functions of insurance are directly related: the functions flow from the very essence of insurance, its purpose.